December 16, 2017 7:19 pm

The Return of Groupon

via Wired

On Thursday, September 12 Groupon stock closed near its 52- week high at $11.76, it’s market cap is above $8 billion and it’s set to make one of 2013’s unlikely comebacks since bottoming out in November 2012.

Under ex-CEO Andrew Mason, 80% of Groupon’s value was shed during the first nine months of it’s IPO, the biggest internet IPO since Google at the time. After Mason left, co-founder and executive chairman Eric Lefkofsky took charge.

Current Groupon CEO - Eric Lefkofsky

Current Groupon CEO – Eric Lefkofsky

Traditionally, Groupon has relied on push marketing in the form of emails to notify customers of daily deals. In August, Groupon announced that pull marketing was taking over and that email now accounted for less than 40 percent of North American transactions, sending Groupon shares soaring. In the second quarter the Groupon App was downloaded 7.5 million times.

In June, shares rose following the stock upgrade from “hold” to “buy”, and the estimated target price from $6 to $10 with Ross Sandler (Deutsche Bank Analyst) expecting them to rise to $17.

However, support from the stock market does not mean real success, especially considering Groupon still isn’t profitable. It instead indicates hope for the future. The lingering doubt for Groupon is if daily deals are sustainable for businesses. Groupon have attempted to separate themselves from the discount spa treatments and half off cupcakes, and move into the traditional e-commerce sales of physical goods.

Groupon’s mobile app may help keep them afloat for a little longer, especially as mobile usage increases, however the premise that Groupon is built on remains iffy and so does the future of Groupon itself.

By G+ Author: Chrissy Reese.

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Chrissy Reese

Chrissy Reese

Writing about this wild, crazy economy and the finance world we live in!
Chrissy Reese

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